Busy accredited investor looking for low risk investments

[Sam Smith]

As very busy professional, with accredited investor status,  I want to find a low risk investment preferably passive to park my money in case the market goes south.  According Robert Kiyosaki you can only build wealth in 2 quadrants owning a business or real estate.  I would like to one day own my own business but I am making good money working at my job and I don't want to buy another job.  Being an absentee owner has it risks as well.  In terms of real estate you can landlord, flip, or lend.  These are all time intensive and risky if you don't know what you are doing.

Landlording: SFR or MF One can free up their time by having the property managed take less profit. However PM never treat your property as if it were their own. They are not shopping around for the best tenants, most cost effective repair, making the tenant happy. their in the business of making money at your expense. The tenant does not care about the asset because they don't own it. It is often perceived that he rich landlord is making alot of money of the tenant as the tenant uses/depreciates the property. Then there are the environmental impacts of the environment on the property snow, hail, extreme heat humidity... all the forces of nature against your asset.

Flip: the market across the country has appreciated after the best real estate price drop in history.  Are we due for another correction?  Rehabing has significant risks once you take down a wall and find out all that deferred maintenance has don to the property.  The holding costs continue to build up during these unforeseen setbacks.  With financing taking longer and more difficult, you could go through acouple of buyers and months before you get a sale (day of closing).

Lending:  This looks like the holy grail.  You don't own an asset, your return is predetermined, and no third party involvement.  However, you have the risk of a bad note.  The cost and agony of foreclosure or obtaining the security can be painful.  

If you were an accredited investor not looking for a short term gain but building wealth you can pass onto your kids or God forbid sooner where would you be putting your time, energy, money and focus?  People have asked where you invest 500k or 1 mil.  My question is where would you invest a 500-1 mil that is relatively low risk, diversified and does not require a ton of time.  Ohh and most importantly it has to be legal and one can sleep at night.

[Jon Holdman]

@Sean Colesorry, but this statement contains a common misconception:

That is just not true.  "Risk", when discussing investments, relates to the range of possible returns.  A low risk investment means one with a narrow range of possible returns.  Bank CDs and treasure debt are two examples.  They have a fixed return with effectively zero chance of losing any of the principal.  Real estate, whether rehabbing, rentals or fix and flips, is high risk.  That means there is a wide range of possible returns.  There is the potential for earning a high return.  But that is in no way guaranteed.  It is also possible to earn a lower return than you expect.  Its very possible, even with making loans, to lose some or all of your principal.

I do agree that there is no "low risk" investment that is going to generate any significant returns these days.   If you want no risk of loss of your investment and a well defined rate of return then you're going to have to settle for one or two percent returns.  If you want a chance at a higher return, you're going to have to put your money into a riskier investment.  But with that comes the very real chance of not getting the return you expect.  And a very real chance of taking a loss.

I've made a hard money loan that did default.  Our expected return, had it worked out, would have been 15% on the money we invested.  After taking the property deed-in-lieu, dealing with the code violations and finishing the rehab, and then selling it, we took about a 2% loss.